New brooms sweep clean as the saying goes. When new managers take control, it is often the case that they want to make changes and to make their mark on the organisation. While this is a natural action of a new manager or executive in a business, it is one that should only be contemplated after careful consideration.
The commercial manager’s responsibility is to produce income, which involves planning the use of assets, and resources, implementing actions, measuring results, adjusting plans and actions to meet changing conditions, and especially delegating, motivating and managing other marketers to produce the required results. Thus the job of the commercial manager is primarily a job of management rather than creativity. Commercial managers will be judged on how much sustainable profitable income they produce, and how efficiently they produce it.
“If you can’t measure it, you can’t manage it” said Peter Drucker. This statement applies as much to the function of business development as it does to every other part of business. However, the statement does not say that “If you can measure it, you can manage it”. Measuring performance does not guarantee good management, but is an indicator of how well resources are managed.
Performance measurements which may indicate the need to reduce costs or improve efficiency, are an essential tool for effective management. But while metrics and measurements provide an excellent guide to the immediate past performance of all the business development activities, future performance is dependent on the staff involved who have to deliver them.
Every management decision has a consequence which may be good or bad for the business, and this is especially so with decisions for change. Change is often disruptive and can demoralize both employees and the customers, on which the business relies. The commercial manager must seek to ensure that decisions requiring change, maximize the positive and minimize the negative consequences. But when considering the potential consequences, the response of the customer should be paramount, as it is they that provide the business income.
Why change? “If it ain’t broke, don’t fix it”. Since the objective of the commercial manager is to maximize profitable income for the long term future of the business, any change should be assessed on the way that it will assist in achieving this result, through improved efficiency, reduction of costs, or improved customer service. However, a change that benefits in one area might be detrimental to another.
Changes that emanate from the employees are generally better than those that are dictated from the management. This is because those that are engaged directly with the operation of a business, are often able to see and suggest where improvements can be made, and because of their “ownership” of the suggestions, more likely to implement them successfully. Employees should be encouraged to make suggestions for improved efficiency and customer satisfaction, and be given full credit for their ideas.
Making changes to the product or the manner of its delivery may be necessary in order to be more efficient, improve the product or service with additional or improved customer benefits, or perhaps to modernise its appearance, especially with a long established product. But while products and their brand image are developed and owned by companies, customers expect that the product will deliver to their expectations every time and they come to rely on that expectation. Thus, in a sense, the customer also has ownership of the product.
While customers may have an initial resistance to a change in the products that they buy, they generally accept them, if they can be shown how the change actually benefits them. However, simply adding additional features to a product or service that do not clearly benefit the customer, will not increase its value in the customer’s eyes.
Before embarking on any change, however small, the commercial manager should consider several questions, because of the potential consequences.
* If change is thought necessary, where is the evidence?
* Do performance measurements indicate that a change in the product, the organisation or the business procedure should be considered?
* If problems have been identified and understood, what sort of changes would be necessary to resolve them?
* Do the changing needs of the customer require a change in the product or the business organisation? Where is the evidence? Is the evidence valid? How do you know?
* A change to a product or service may improve efficiency and profitability, but what would be the effect on the customers’ satisfaction or their perceived image of the business? How do you know?
* Who benefits from the proposed change, the customer or the company? – How do they benefit?
* How might a change to the company name, image or logo be seen by existing and potential customer? Why is this thought necessary? Where is the evidence and is it valid? (There are many examples of expensive changes of name and image which have had a negative reaction from customers and a detrimental effect on the business, e.g. Microsoft with Windows Vista, Kellogg’s revamping Special K, and Coca Cola’s New Coke, and many others.)
* Is the change purely internal to improve efficiency, perhaps through internal reorganisation or a change of procedure? Will such a change effect the customer and if so how?
* What will be the positive consequences of the change?
* What will be the negative consequences of the change?
Experience shows that change without real evidence of its necessity, can easily be damaging to the product and the company’s fortunes. Customers provide the business income, thus any change to the product or service that is perceived as detrimental to the customer will have a negative effect to the business.